Recent Scams and Frauds

There have been lots of scams and frauds over the course of recent history. Here’s a sample of some of the more interesting ones.

Bernie Madoff

In December, 2008, it was discovered that Bernard “Bernie” Madoff executed a Ponzi Scheme, which enabled him to live like a king for a number of years.

Here’s what he did:
First he gained the trust of a few extremely wealthy, important investors. Those investors then gave him money to invest for them. It is quite possible that he did, in fact, do what he was supposed to with some of the money. But he also kept convincing new people to have him invest their money, and he would give (some) of the newly received money to previous clients, and claim that the money had come from the investments. He would at times give extremely large amounts back to his clients. Therefore, the wealthy investors would get their friends to invest with Madoff, creating a chain reaction. Finally, after the markets crashed, one of Madoff’s children confronted him with the unreasonable amounts of money Bernie Madoff’s investors were still receiving. At that point Madoff confessed to having run a Ponzi scheme involving billions of dollars.
In March, 2009, Madoff pleaded guilty to 11 different federal crimes. He is now carrying out his jail time of 150 years. Yes, that was one-hundred fifty years. No, that was not a typo.
Good luck living that long, Madoff!

Frank Abagnale, Jr.

Abagnale has not done anything unlawful these past few decades, but the movie “Catch Me If You Can” (which was loosely based on his autobiography of the same name) came out in 2002, instantly boosting his fame.

He worked more in the area of check-fraud than traditional con artistry, but he certainly caused a lot of trouble. Millions of dollars worth of trouble.

Eventually after he got caught, Abagnale turned to anti-fraud stuff. He knew what needed to go into check-fraud, so he was the perfect candidate for catching others who did that sort of fraud. He knew exactly what flaws in forgeries to look for, and knew where to get the machinery needed for fraudulent checks.

What is less well known is that he even developed new, enhanced security features for checks, to make forgeries even more difficult.

A lot more information about Abagnale is in the movie “Catch Me If You Can.” Although the movie isn’t exactly accurate, I highly recommend it. It does have information about some of his scams and frauds.